Exercise 1 {50 points) Assume the following demand and supply equations: Q; = 20 BF, and Q, = -l 4P. 3} b} C) l. 2. 3. 4. 5. 5. d) 3} Write the demand equation in the form y = I'Xb (2 points} Write the supply equation in the form y = mx+b (2 points} Derive the following: Slope of the demand curt-'e {I penny Y intercept of the demand curve {'1' point) X intercept of the demand curve .3\" 1' point) Slope of the supply mine (I point} Y intercept of the supply curve (I point} X intercept of the supply curve (I potntjf Calculate the equilibrium price and equilibrium quantity (Endpoints/1 lGraph the two cm'yes [clearly label your axes and ctu'ves) {I Spams?) Suppose there is an increase in demand and the new demand mction is Q3 = 50 2P. f) 3) Provide some reasons that cause the demand curve to shift? {I Sputum} Calculate the new equilibrium price and new equilibrium quantity (i (3 points) Exercise 2 (20 points) Using the midpoint formula, calculate the price elasticity of demand. Is it elastic or inelastic demand and why? (10 points) Price ($) Quantity Demanded (units) P1 = 7 Q1 = 20 P1 = 3 Q1 = 25 Using the basic formula, calculate the price elasticity of supply. Is it elastic or inelastic supply and why? (10 points) Price ($) Quantity Supplied (units) P1 = 3 Q1 = 20 P1 = 5 Q1 = 60Exercise 3 (30 points) Discuss the difference between perfect competition, monopolistic competition, monopoly and oligopoly. Provide some examples for each market structure